The Value Hunters of Aurangabad
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Image: Vikas Khot
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THE DEAL MAKER Sachin Nagori, 41, is a first-generation real estate developer
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achin Nagori won’t forget the occasion in a hurry. It isn’t often that an unknown businessman in distant Aurangabad is chased by The New York Times or The Times of India for an interview. Or have Wilfried Aulbur, the then managing director of Mercedes Benz India, drop by at his house.
In October 2010, Nagori had pulled off a coup. He persuaded 151 businessmen to buy a premium luxury symbol: A Mercedes Benz car. By using their collective bargaining power, Nagori managed to extract a hefty 20 percent discount from the German carmaker. The bulk sale made its way into record books as the largest number of vehicles sold in a single day in a city, turning Nagori into an instant celebrity. In a small town like Aurangabad, the news spread like wild-fire, catching almost everybody’s imagination. And that included Pankaj Agrawal, another businessman in search of fame.
A first-generation entrepreneur, Agrawal owns an LG Shoppe home electronics department store and a Bajaj Auto dealership in Aurangabad. He has a large home on one of Aurangabad’s arterial roads and owns two cars. Agrawal decided a luxury car would be more befitting for his status in society. And what better than an imported sports car, the BMW M6?
By November, Agrawal had lined up some interested buyers so he too could negotiate a bulk deal. Aurangabad had no luxury car dealerships, so he approached the nearest one in Pune. He lured BMW into doing a road show and by the end of it, Agrawal was all over the national media, taking credit for masterminding the sale of 101 BMW cars in Aurangabad — though there was no contract with BMW yet.
That’s when BMW got a shocker. Close to 40 customers at its dealership in Pune called in to cancel their bookings. They wanted discounts similar to what BMW had been offering customers in Aurangabad. Senior executives at the car maker went into a huddle and decided that it made no sense to support bulk deals. “I consider the sale of 101 cars like this as the starting point of brand erosion. If I agree to the unreasonable discounts that the group asks for, the dealer will not make any profit, we will not make any profit and also anyone else who does not get the discount will heavily complain. What I sell to people is not a product, but a dream,” says Andreas Schaaf, president, BMW India. Over the next few days, the company called off negotiations. Agrawal lost face. And Aurangabad’s second tryst with fame turned into a farce.
Yet despite losing the sale, the key lesson hasn’t been lost on BMW’s German president. “Aurangabad is a good example where nobody had that city on his landscape, but it had the potential. Obviously, people have the buying power to buy premium luxury cars. And the consequence out of this whole thing is that as BMW, we have to speed up our dealer network sales,” says Schaaf. For starters, BMW has already sold 20 cars in the city and is looking at shortly setting up its service station in Aurangabad.
On the face of it, Aurangabad’s rather dramatic entry on India’s consumer map may seem a bit contrived. For all the conspicuous consumption, there’s plenty that’s remained the same, especially the deep sense of community among its residents.
Spread over a radius of about 8 kilometres, Aurangabad has a population of about 1.4 million. Traffic is minimal, the roads are barely motorable and the errant traffic sense of its residents is no different than in any other Tier II town.
It isn’t until you hit the town’s southern side that you come face-to-face with the new wealth: A stretch of sprawling bungalows dotting the streets. Jalna Road, an arterial road that connects the city, is the nerve centre. Practically everything is located in and around this stretch. The evidence of prosperity and change are clearly visible; from the four-month-old 800,000 sq ft Prozone mall, which is the largest and only mall in the city, to dealerships of automobile brands like Skoda, Nissan and Maruti Suzuki and eateries and hotels like the Taj and Lemon Tree.
In the last five years, the city has morphed well beyond its status as Maharashtra’s tourism capital into a hotbed of industrial activity, primarily led by the automobile and engineering cluster. In more recent times, the growth has been spurred by agriculture and real estate development. Cotton farming has grown in the surrounding villages. Farmers have thrived thanks to cotton prices hovering at an all time high of around Rs. 4,500 per quintal. Residential real estate prices have zoomed. Properties were valued at around Rs. 20 lakh an acre in areas like Nashik Road, Old Bombay Road and Beed Road in 2006. Prices have risen five times in the last four years.
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Well done Ashish Mishra
